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» VIEW ALL POSTS Aug 29 2007   11:31AM GMT

Seagate: We are not for sale



Posted by: Beth Pariseau
Tags:
Storage

A recent New York Times report touched off speculation last week that Seagate was about to be bought out by a Chinese company, rumored to be Lenovo, “raising concerns among American government officials about the risks to national security in transferring high technology to China,” according to the Times report.

The Times report was based on an interview with Seagate CEO William D. Watkins, in which Watkins is quoted saying there are no plans to sell the company, but that ” if a high enough premium was offered to shareholders it would be difficult to stop.”

Since then, Seagate has released a statement through news wires clarifying (repeating?) that there are no plans to sell the company, to a Chinese buyer or anyone else. Ironically, this now has some in the industry eyeing Western Digital as the possible acquisition target for a Chinese company. Might it have been Watkins speaking generally or hypothetically?

I have to admit I’m scratching my head a little about the supposed security threat–even in the original Times report, two contradictory statements about it follow one another. An anonymous industry executive is quoted as saying “I do not think anyone in the U.S. wants the Chinese to have access to the controller chips for a disk drive. One never knows what the Chinese could do to instrument the drive.” But a paragraph later, it’s noted that “China, however, still lags in basic manufacturing skills like semiconductor design and manufacturing.” So…do they have the means to commit dastardly acts of international espionage or not?

Even if it’s not this acquisition, this time, everyone knows China is a fast-rising power in the global economy. And they already make quite a large proportion of the products Americans use every day. It seems from my view that at least one instance of this type of acquisition is inevitable. Also, from my point of view–which I will admit is not one of experience in constructing foreign policy–it’s probably better to learn how to work with the situation than against it.

What are your thoughts?

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